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DURHAM — County Commissioners have given state regulators the green light to allow the Research Triangle Institute and another Durham nonprofit to take advantage of tax-exempt financing for a combined $32.5 million in construction.
The vote will allow RTI to borrow $25 million for a new office building at its RTP campus, and the Durham-Chapel Hill Jewish Federation to borrow $7.5 million for a new community center off Cornwallis Road.
Monday’s votes by Durham commissioners were a prerequisite for the N.C. Local Government Commission to give the two groups permission to use tax-exempts bonds. The state panel is already evaluating the applications, bond counsel Mary Nash Rusher said.
Rusher stressed that RTI and the Jewish Federation are solely responsible for repaying the money.
“The county has absolutely no liability for these bonds. It is not your debt,” she told County Commissioners. “You’re simply stating on the record that you have no objection.”
She explained that federal tax law allows nonprofits and other concerns to borrow money tax-exempt through a government issuer.
Durham, like most counties in North Carolina, has set up a special board, the Industrial Facilities and Pollution Control Financing Authority, to field applications.
As the board’s name implies, such bonds more often have been used here and elsewhere in the state to entice companies to build manufacturing facilities. The General Assembly amended the enabling statute for the bonds early this decade to open the field wider for nonprofits.
They now qualify as “special purpose projects.” The law specifically makes bonds available for a wide range of facilities, including the type of recreation center the Jewish Federation wants to build and most anything that RTI would take on.
Despite the easing of state rules, applications for the bonds have remained rare. “This isn’t something we’ve been seeing a lot of,” county Manager Mike Ruffin said.
But Rusher said commissioners might see more this year because the year-old federal economic-stimulus bill allowed banks to buy such bonds and thus made it easier for nonprofits to obtain capital.
The Jewish Federation intends to build its community center near the Lerner Jewish Community Day School, on a site off Cornwallis Road close to the U.S. 15-501 Bypass.
Federation President Matt Springer said the facility will be open to people of all faiths. He added that construction is likely to start in about six weeks.
RTI’s building will replace an older one on its campus, and is expected to house about 560 workers, Treasurer Ward Sax said. It also will include a parking deck.
The institute — founded in 1959 by UNC Chapel Hill, Duke University and N.C. State University — is in a growth mode and appears likely to add about 60 people a year to its staff over the next 2½ to three years, Sax said.
Two commissioners, Joe Bowser and Brenda Howerton, took advantage of the occasion to complain that RTI excludes N.C. Central University from its research effort.
Sax said the institute employs 61 N.C. Central graduates, but conceded it “does not” collaborate with the historically black school on research projects.
Bowser noted that N.C. Central has beefed up its research programs, particularly in biotech. “Everything has grown since [1959], including N.C. Central,” he said.
